1. One general rule that I have learnt purely by experience as a Zimbabwean is that there is a positive correlation between more decrees to control the foreign currency (forex) market and the expansion of the parallel (black) market.
2. In other words, the more the government tries to command & control the formal market by decree, the more the informal/parallel market grows. This is partly because economic actors seek to avoid the debilitating & punitive impact of the formal market decrees.
3. It also grows because formal market controls create opportunities for arbitrage. This happens because the formal market, access of which is restricted to a few, offers cheap forex which can be sold at higher rates either directly on the parallel market or as goods for sale.
4. It’s usually the case that beneficiaries of these cheap schemes are PEPs (Politically Exposed Persons). They simply buy forex from government & sell it on the parallel market. It’s a trick that’s been used for decades. The Willowgate Scandal was based on the same principles
5. PEPs bought imported vehicles at cheap rates from a government company & sold them for huge profits. It’s been happening at great scale since the 2000, leading to record hyperinflation in 2007-08. The government thinks more controls will solve it. This is wishful thinking.
6. If the government were a doctor, it’s diagnosis would be awful. The issue lies in the old laws of supply & demand. There’s more demand for forex which can’t be met by supply. If there were adequate forex supplies, there would be no need for these stringent decrees.
7. As long as it is supplying forex at artificially low rates, there’s always an opportunity for arbitrage because there’s someone out there who needs forex or goods & is prepared to pay a higher rate for them. Government therefore is the supplier to the parallel market.
8. Government is trying to direct the market but as always happens, the market will devise ways to dodge the rules. One prediction is that we will end up with a shortage of certain goods in formal shops, but an abundance of them on the street but sold at parallel market rates.
9. Those who can afford it will hoard goods at controlled rates and sell them on at parallel market rates on the street. “The street” is both literal & metaphorical. Since the controlled rate is rigged, government has effectively imposed price controls. It always ends in tears.

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Alex T Magaisa 🇿🇼

Alex T Magaisa 🇿🇼 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @Wamagaisa

19 May
1. The letter announcing the appointment of judges to the Constitutional Court is odd & vague so that it is not possible to determine the law under which they are being appointed. It says the President has “approved” the appointments “at the instance” of the Acting Chief Justice.
2. The letter is coming from the Judicial Service Commission. The “approval” bit is perplexing. It’s either the President appoints or he doesn’t. Whether before or after Amendment No. 2, he is the appointing authority. If they are acting judges, his approval is irrelevant.
3. True the judges take their oath before the Chief Justice but it is unclear whether they are being appointed under the old procedure when they were interviewed last September or as amended by Amendment No. 2. But does it make any difference to the contentious cases? None.
Read 4 tweets
18 May
1. Regarding the constitutional matter, I fear people are missing the forest for the trees. I have said that we have a constitutional crisis & it emanates from both amendments. It is that a Real Madrid or Barca player cannot choose the referee for El Classico. Let me explain.
2. All the judges of the superior courts are parties to the proceedings. They cannot properly sit as referees in a matter in which they are involved & they have an interest. In short, they are all conflicted. This is the forest. All the other technicalities converge here.
3. Now, some may argue that a special panel can be chosen to do it. Fine. But someone has to choose that panel. That cannot be done by players in the game because they have an interest. The JSC unnecessarily dragged itself into the matter when it could have stayed neutral.
Read 7 tweets
18 May
1. 34 years ago, Zimbabwe’s first democratic Constitution was drastically amended via the infamous Amendment No. 7. It introduced the Executive Presidency dumping the Westminster model. I was in Grade 7, barely aware of what was happening. Zvaitonzi Long Live President RG Mugabe!
2. It was only when I was in law school 7 years later that I began to fully appreciate what it meant. Back then, debates were in newspapers & magazines like Moto & Parade often weeks or months after the event. It took a while to build constitutional consciousness.
3. Today, we have multiple spaces where debate is taking place, people getting views from different voices as events happen. This is not a bad thing. On the contrary, it is healthy for society to be exposed to multiple views; to be part of the discourse. It should be celebrated.
Read 4 tweets
16 May
1. I have immersed myself in studying the US Civil Rights Movement in the 50s & 60s. The legal strategy is part of the fight for rights & democratic space. It is not the only one but it is important. Knocking down the edifice of dictatorship is not a one day event but a process.
2. I remember one of the doyens of that struggle saying every struggle requires moments of victory, no matter how small. They provide a glimpse of hope; that it’s possible. We knew the regime would fight back & it is. Still, we pursue; focused & tenacious. Nothing lasts forever.
3. They want you to believe it’s all meaningless; to not have hope and to be fatalistic. This case has them at sixes and sevens as evidenced by the tantrums & vitriol. You don’t dwell on what has happened but focus on what may happen & be prepared for it.
Read 4 tweets
12 May
1. Each step they take defines the CONSTITUTIONAL CRISIS. The @JSCZim wants to be involved because in its mistaken view the judges cited in the lawsuit are its “employees”. It forgets that on that reasoning the judges presiding over the dispute also qualify as its “employees”.
2. This leaves the applicants facing an opponent that purports to be the employer of the presiding judges! The @JSCZim wants to have its cake and eat it at the same time. It wants to represent judges who are being sued while distancing itself from judges presiding over the case!
3. The @JSCZim cannot be both things at the same time. It could have applied for joinder on other grounds, such as that it is required to defend judicial independence & the constitution, in which it would be challenging the illegal amendment, not defending it.
Read 4 tweets
11 May
1. Left is the late former Chief Justice Godfrey Chidyausiku. On the right is his successor Chief Justice Luke Malaba. Months before CJ Chidyausiku reached his 70th birthday he started the process of choosing his successor. 4 days before he is 70, CJ Malaba has no successor.
2. In fact, everything points to CJ Malaba succeeding himself. This is ironic. CJ Malaba was the beneficiary of CJ Chidyausiku’s respect of constitutional limits to his judicial term. He had his faults but on this occasion, he did what a professional judge & leader would do.
3. 4 years later, it’s CJ Malaba’s turn to give way to a fellow judge. There are there, judges awaiting their turn. But, it seems, he doesn’t want to go. Zimbabwe has had the misfortune of leaders who don’t want to give up power. But you would have thought judges were different
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!

Follow Us on Twitter!